Despite the COVID-19 pandemic, global trade hit a record year in 2021, with over 80% of the trade volume carried by sea.
According to the United Nations Conference on Trade and Development’s (UNCTAD’s) Review of Maritime Transport 2021 report, Asia’s predominance in global maritime trade strengthened in 2020, as it maintained a 41% share of total goods loaded and increased its volume of goods discharged.
The resilience of the region’s containerized trade and swift rebound in exports is noteworthy as the region also maintained its pole position as the global hub for container traffic, with nearly two thirds being handled at Asian container ports.
The liner shipping connectivity of the continent also outperformed other regions, with the top five most-connected economies in the second quarter of 2021 being in Asia – China, Hong Kong (Special Administrative Region, China), Malaysia, Republic of Korea, and Singapore.
With only less than 30 years away from the International Maritime Organization (IMO)’s global maritime emissions target to reduce emissions from marine shipping 50% by 2050 (relative to 2008 levels), there is no better time than now for companies in the Marine and Offshore Industry in Asia to accelerate their transition to a greener and sustainable future.
Decisive green transition
Singapore is making a decisive green transition given opportunities arising from global supply chain shifts, digitalisation, and decarbonisation.
“With more than 100,000 merchant vessels plying our seas today, many will have to be replaced in the coming decades,” Deputy Prime Minister and Coordinating Minister for Economic Policies Heng Swee Keat said at the Singapore Maritime Week in April 2022. “…we are approaching the future from a position of strength. We must make the best use of this strength to transform, if we are to realise the growth potential.”
Despite the COVID-19 pandemic and the geopolitical uncertainties, the republic’s sea transport sector has remained resilient. Singapore remains the world’s busiest container transhipment port, handling a record high of 37.5 million TEUs of container throughout in 2021, an increase from 36.9 million TEUs in 2020. In total, the nation state handled 599.0 million tonnes of cargo in 2021. Vessel arrival reached 2.81 billion gross tonnage (GT).
In 2021, the International Maritime Centre (IMC) attracted 23 companies to expand or set up operations in Singapore. Singapore is also one of the world’s leading bunkering hubs, supplying over 50 million tonnes of marine bunker fuel to vessels that ply international shipping routes in 2021.
And for the fifth consecutive time, Singapore has been ranked the top leading Maritime City of the World in the international benchmarking study by Norwegian classification society, DNV and Norwegian consultancy, Menon Economics AS.
Singapore’s role in greening international shipping
As a premier global hub port, Singapore is well poised to catalyse the greening of international shipping. As a clear sign of the nation’s commitment to build a sustainable Maritime Singapore and contribute to greening international shipping, the year 2022 marked the launch of many significant and ambitious long-term strategies.
In 2022, Minister for Transport S Iswaran unveiled the Maritime Singapore Decarbonisation Blueprint 2050 that charts out strategies to drive domestic maritime decarbonisation, and work with partners to catalyse green international shipping. The maritime decarbonisation agenda brings about new areas of green growth for Singapore, for example in the developments of alternative fuels and green technologies.
Singapore is also set to join the Clydebank Declaration for Green Shipping Corridors together with 22 other Signatory States. The Clydebank Declaration aims to establish green shipping corridors between ports by deploying zero-emission vessel technologies on voyages, or alternative fuel and charging infrastructure in ports.
Another initiative that was launched in 2022 is the Coastal Sustainability Alliance, a partnership to support the electrification of Singapore’s harbour crafts by jointly investing in a network of charging points for electric boats. The alliance includes Kuok (Singapore) Limited Maritime Group, Agency for Science, Technology and Research (A*Star), GenPlus, Jurong Port Singapore, TCOMS, Sea Forrest and TES.
Deputy Prime Minister Heng Swee Keat also announced the Sea Transport Industry Transformation Map (ITM). The refreshed blueprint aims to expand Singapore’s international maritime centre ecosystem as well as nurture the MarineTech startup ecosystem. Among its ambitions is the development of Tuas Port into the largest fully automated container terminal port in the world, and to grow the sector’s value-add by S$2 billion between 2020 and 2025. There are also plans to create 1,000 additional good local jobs by 2025.
To seek global perspectives on emerging trends and critical developments that will shape the maritime industry, Ministry of Transport (MOT) and Maritime and Port Authority of Singapore (MPA), established the Maritime International Advisory Panel (IAP) which comprises top global business leaders from the maritime sector and adjacent industries such as consultancy, e-commerce, energy and commodity, finance, logistics and manufacturing, and technology. The Maritime IAP, chaired by Minister for Transport and Minister-in-charge of Trade Relations Mr S Iswaran, held its inaugural meeting during the Singapore Maritime Week 2022.
During the Singapore Maritime Week, the Global Centre for Maritime Decarbonisation (GCMD), which was set up to bring together industry partners, researchers, and to drive R&D and pilot novel decarbonisation solutions, signed on 4 new partners, adding to the 4 partners that were onboarded earlier.
Professor Lynn Loo, CEO of GCMD was quoted as saying that bp, Boston Consulting Group, Chevron and the International Chamber of Shipping will bring “complementary perspectives that are critical to decarbonising the sector” and “a combined S$25M cash and in-kind contributions as well as their core competencies, technologies and relationships towards our common goal to deploy low-/zero-carbon solutions cheaper, cleaner, and faster.”
Companies pivot to longer-term green strategies
The SGX research report on 22 April 2022 highlighted that while the Maritime and Offshore Services sector continues to be governed by crude oil price movements in the near-term, companies have been pivoting clean and renewable energy related businesses, as part of their longer-term strategies.
The report cited examples of the pivots some companies have done:
According to independent energy research firm, Rystad Energy, global offshore wind expenditure is projected to grow at a compound annual growth rate of 11% this decade to reach US$126 billion per year by 2030. The opportunities for growth are immense for the industry.